PayPal has announced that it will lay off seven percent of its workforce, the American company said in a statement on Tuesday. CEO Dan Schulman emphasized that the company was operating in a “challenging macroeconomic environment,” and said that while the firm had made progress getting its cost structure under control, it had “more work to do.”
The CEO wrote that laid-off workers would be given severance and support after they left the company.
He said: “We will treat our departing colleagues with the utmost respect and empathy, provide them with generous packages, engage in consultation where required, and support them with their transitions
“I want to express my personal appreciation for the meaningful contributions they have made to PayPal.”
PayPal is just the latest tech company to announce major layoffs, following a slew of others including Meta, Alphabet, IBM, Microsoft, Twitter, Spotify, Stripe, Amazon, and Salesforce.
Many companies went on hiring sprees during the height of the COVID-19 pandemic.
But when advertising revenue fell this year, spurred by fears of a global slowdown caused by inflation and subsequent interest rate hikes by the Federal Reserve, these tech companies found themselves in a very different business landscape.
Moshe Katri, analyst at Wedbush told Reuters: “Similar to other tech companies, PayPal is seeking to position itself financially and strategically, bracing for an economic slowdown.”
Thomas Hayes, chairman and managing member at investment firm Great Hill Capital told Reuters that “tech over-hired during the pandemic and rationalizing staff during a soft period will help them to retain margins as conditions recover.”
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He claimed that he had to do the deed before things got worse. Other executives in the meeting claimed that the decision had to be made.
Mr Pichai said: “If you don’t act clearly and decisively and early, we can compound the problem and make it much worse.
“These are decisions I needed to make.”